Sears finds customers responding to thrifty offers

With its layaway program proving to be popular among Sears and Kmart customers for back-to-school, Sears Holding Corp. has launched a new program designed for cost-conscious consumers looking to manage their holiday shopping.

Sears recently introduced Sears and Kmart Christmas Club gift cards, which allow consumers to save ahead for their holiday purchases at Sears and Kmart stores or online at either merchant's Web site.

Consumers who sign up before October 31 can earn up to a 3% reward, up to a maximum of $100, based on the stored value on their cards as of November 14 — the last day funds can be added to the cards.

Cards can be activated with as little as $5, and funds can be added at any Kmart or Sears location, as well as online at the stores' Web sites. There are no fees associated with the Christmas Club card.

Sears is planning a multichannel promotion for the cards. The offering will be promoted in 15-second spots on network and cable TV; online with banner ads that drive users to the Christmas Club microsite for either brand; and through e-mail, circulars and point-of-sale signage.

The Christmas Club program "has such a simple customer proposition - save now for the holidays," that Sears will focus a significant amount of its marketing around it, said Tom Aiello, VP of PR at Sears. "Consumers don't want to sacrifice on gift giving this year, but they are concerned about how they are going to save money," he continued.

Sears is already seeing a strong response to another program designed for cost-conscious consumers. Last year, Sears reintroduced a layaway program, which had always been at Kmart.

Layaway "has been so strongly received by customers for back-to-school and we feel that this is going to carry over into holiday," said Aiello.

In a recent survey commissioned by Sears and Kmart, 58% of American consumers said they are more concerned about how they are going to pay for their holiday shopping this year compared to last year. In addition, 56% said they plan to save money for the winter holidays this year, with 32% saying they have already started saving for the holidays and another 38% saying they plan to start saving soon. In addition, 57% said they will be spending less on gifts, 53% will be shopping at more affordable stores and 49% will be planning and setting a shopping budget ahead of time.

The online survey was conducted by Kelton Research from August 3 to 7.

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